The Economist recently posted about former Groupon boss CEO Andrew Mason’s favorite business books and his issue on new workers without any business books under their belts. There are certainly plenty of reasons to avoid much of the garbageout there on the business book shelves. The Career News section of the Economist used this as an opportunity analyze the choices and list some other interesting books. This reminded me of a long-delayed post listing my favorite books for business school students, new graduates and anybody entering the workforce.

ANDREW MASON, Groupon’s ex boss, complained in a recent blog post that too few of the young people who joined his firm had read a single business book. This, he said, meant they “would arrive at orientation with minimal understanding of basic business wisdom”.

Are books a good way to learn about business? In some ways, recruiting people with a working knowledge of management literature is about correlation not causation. In other words, a firm might want to hire them because they are inquisitive enough to read about business strategy, not because the books themselves will have imparted much wisdom.

Bonus for law students is Typography for Lawyers by Matthew Butterick. Should be mandatory reading in all law schools. No excuses for ugly fonts and poorly formatted documents.

These books look at conventional management or financial wisdom. Sometimes even skewering the fortune tellers that populate those industries. While extremely arrogant, everything by Nassim Nicholas Taleb is fascinating and thought-provoking. He has proved quite prescient over the years writing about business fragility right before the financial crisis. Tribal Leadership is simply the best book I have ever read on motivating and leading teams or groups of people. The book was so influential to Tony Hsieh, CEO of Zappos.com that he bought the rights to distribute the e-book for free. The Signal and the Noise is Nate Silvers work on predictions and where they seem to succeed and fail. I should write a little more about each one but it is a busy holiday weekend approaching.

In recruitment and business statistic circles, the term quality of hire is popular as of late. Many firms are discovering new methods to track and quantify this data.

One of the most important ways for a business to gather these statistics is by tracking the source of applicants. This white paper by Indeed should be required reading for recruiters and anybody who does recruitment advertising. The article stresses the importance of quantifying your applicants based on source. A quick comparison of average applications from Craigslist, Monster and Career Building paints a pretty clear picture of why the later two are in decline (provided by Craigslist though). Craigslist provides far more average page views for a fraction of the cost. Specialized job boards however are doing quite well in the recruitment advertizing market. To track your hiring metrics you need a feature in your applicant tracking system. If you still get resumes via email then you can tack them via a simple spreadsheet as well. Once a company has a good grasp of its recruitment statistics, the next step is too compare them with quality of hire metrics.

Quality of hire is a broad term but it can be any number that compares the hiring source, job expectations or qualifications with eventual results. For example Company Z hired 200 employees in 2011. Of those 100 employees only 50 stayed on through a full year. In that particular snap shot, the quality of hire would be 50% for the entire recruitment process. However that is only one simple method of evaluating quality of hire. Another method might compare quality of hire of external versus internally referred applicants. A company could even compare the quality of hire between recruitment from different colleges, staffing vendors or job posting sites. These statistics could be used to create mathematical models predicting success of applicants based on some specific qualifier. Smaller businesses should note that a small sample size is not enough to make assumptions and that correlation does not imply causation. At the very least though, quality of hire metrics can help evaluate better spending on recruitment advertising.

The economist has a great article on the Icelandic debt woes. It outlines the possibility of a future flood of government and international defaults.

My analysis of this is that the investors took the risk in this case. The “savers” in this case should have exercised more caution in picking their accounts. A higher rate of return should be assumed to come with a higher rate of risk or volatility. My suggestion?

Consider any investment/savings in a foreign country with “high returns” to be a risky investment, even if it is a “savings” account.

Never use a savings account without a Government or Government corporation (ie FDIC) guarantee. In the case of Icesave, even the savings insurance plan failed investors and savers.

Below are some links that illustrate how much we underestimate endemic risk.

An investor or saver reading one of the above articles might think they were secured by a government guarantee. However the Economist article clarifies in the text I copied below.

“Landsbanki’s products were not covered by the domestic deposit-insurance schemes of the target countries. Under a passport system covering the European Economic Area (a broader, watered-down version of the European Union), investors were supposedly covered by the Icelandic deposit-insurance scheme.”

Clearly now that the European countries paid back their savers and they now want to money from Iceland. Now a vote will decide the issue. I think there is serious confusion on how savers are protected domestically and internationally. Clearly there is confusion and misinformation about international savings. Governments need to better inform, outline and legislate how transnational investments are covered under Deposit Insurance plans.

My advice to savers? Find a good domestic Credit Union or established bank.